Dell

I'll email v14 to the prof. - Dan

DONE.

I can't email him but I'll print it and bring a copy. (I don't have pptx on my work computer) - Kyle

Has anyone e-mailed the final version to the prof?

Dan

Sorry, I have not been on all afternoon. Stuck in some meetings. Yes, I meant to have the red to show not an easy core competencies to copy. I can't print from my work location today.

See you all in a few. I will plan on presenting slides 5-8 and 13-19.

thanks, Ray

That's what I thought but wanted to be sure. Am I printing for class or is someone else bringing? Tom

Tom - I saw that too, but what I think Ray it showing is that there is nothing easy for competitors to develop. Ray can you tell us if that is what you meant? Or if you need to change one of the circles? - Jeremy

Slide #19 shows the intersecting bubbles and below it notes what the colors mean. Red, yellow, and green but there is nothing red on the slide. Tom

I resized the title for the Timeline slide, it was covered up by the table. - Jeremy





I just made a small gramatical change to one of my slides. If we do present, I can open it up and then pass it along to Ray on slide #5, then take the SWOT analysis and whatever else you guys think. I doubt we present though. It looks and flows really good. See you all tonight.

Thanks, Jeremy

Done. Sorry I called it 12 instead of 11, cannot count ---

Guys, Can someone format the text on slide 9 to match the text on slide 13? That's the only formatting issue I see. Thanks - Kyle



I added a couple gramatical changes. I think this looks pretty good and seems to flow well. I am good with presenting slides 5-8 and/or 13-19 if we get called on.

Ray

I aligned some headings, changed Porter's just a little bit and shortened the PPT for Porter's a bit. Added a couple of slides on demand after Porter's. Are we leaving the recommendations as is? or do we need to be more concise? I am on vacation this week so I am home all day and will do whatever asked. Can print for class and bring copy on flash drive if needed. Let me know if I need to work on something today. Tom



I'll be available for about 1/2 hour early in the morning and then for an hour at lunch. Let me know if anything is needed. - Dan

Our main question has changed in V6. The order is very different. I will add my changes to whatever the latest version is up by 6am.

Guys - I added Dan's v7 slides to the attachment. I formatted the slides and added the recommendations too. Please take a look at it and see if there are any errors or incomplete slides - Dan's are the only slides that have holes that I see and he's noted that those are incomplete as of now. I have a marketing piece I have to work on so I'll check this page at work tomorrow. Other than Dan's slides I think we just need to make sure the presentation flows as it is and divide it up to present if we're called. I'm good with presenting slides 34-39 if someone feels comfortable transitioning after slide 33 (I'm not as comfortable with slide 33). Thanks - Kyle

I like the new direction too and the recommendations. I think they fit what McDermott likes to see.

Let me know if you need me to do anything else.

Thanks, Ray

I still have a few holes to fill in, but wanted to go ahead and get this on here.

Kyle -Nice on the recommendations. I agree with all of them.

Dan

Chinese market is key, especially if they can do it with the Dell flavor. Nice recommendations. Tom

I agree with the recommendations that Kyle has posted. I really like #1 and #6 since it seems every case we have studied our professor determines that it would be good for the company to acquire someone. I would add that we need to approach the Asian markets with a different approach than Dell's current business model. It seems Dell will have to enter the retail markets in order to allow the asian customers to touch and feel the pc's since they are hesitant to make a big purhase without being able to see it. If there is anything you guys need me to work on just let me know. I will check back in a little later tonight and I will have time on my lunch hour to add anything else we need.

Thanks, Jeremy

Back online. Getting caught up on the latest then finishing the strategy slides. Feel free to delegate something else to me.

- Dan

My rationale for selling in retail stores: I know it alienates what the company was about but the environment is changing and they can't cling entirely to who they used to be. rationale for acquisition - increased competition, falling prices, and more demand has created an environment where acquisitions are the best way to quickly gain market share. I added another step to the recommendations - Hire product development specialists from product/branding focused companies. Help them to get a fresh perspective on their product and new ideas for development.

Team - I've been thinking about the case for the last couple hours. I looked at some recent posts and included some of them below. Here's what I think our recommendations should consist of in order of importance:

- Kyle
 * 1) Acquire a larger IT services company to supplement Dell's current IT services department and gain immediate market share – CSC a possibility.
 * 2) Focus on critical customers by creating dedicated department head's with authority to meet the demands of the following groups:
 * - Large Companies (larger than 400 employees) (already exists, continue current services)
 * - Small-Med companies (less than 400 employees)
 * - Government Agencies
 * - Higher Education Universities
 * - K-12 Primary School Systems
 * Focus on speed of service, customization to meet needs of each organization, build loyalty with groups who have more frequent demand and servicing needs.
 * 1) Hire product development specialists from product/branding focused companies.
 * 2) Help Dell to get a fresh perspective on their product and new ideas for development.
 * 3) Redesign laptop and PC brands to make them more exciting for personal use consumers - Dell's competing with HP and Apple who are creating products customers desire.
 * Financials indicate consumer products are struggling vs. competition.
 * Increase R&D budget to create more exciting models.
 * 1) Sell only a couple standard model PC's and laptops in retail centers like WalMart and BestBuy – out of sight, out of mind mentality for consumers.
 * Allows Dell to appeal to everyday customers who don't desire custom computers.
 * Use suppliers/manufacturers to build these standard models with no changes to the specs – keep costs down.
 * Continue to build PC’s and custom laptops in-house to take advantage of logistics and efficiencies
 * This also builds brand awareness with consumers who may want custom computers.
 * Allow current marketing programs to target higher-end users who desire personalized PC’s.
 * 1) Acquire Chinese PC/laptop maker to enter Chinese market – Increase revenues from Asia-Pacific/Japanese market.

Yes I will. Should I also work on Porter's, some slides are incomplete but not sure if someone is working on and I have not looked at V6 below yet.

Recommendation possibilities: May need some R&D investment. HP doubled its R&D $$$ thru acquisitions. If the value chain for Dell does not work the same outside the US, they will not be first to market without increased R&D.

The Dell name, customization for customers, increased R&D, beating the competition in new tech, may allow them to use their core comps and create an advantage with increased customer service. Being a leader in customer service can build relationships and help differentiate from others who outsource CS. May help rebuild reputation where needed.

Tom

I tried to put this in some type of order. Dan, I did not add your slides yet. Could you insert them whereever you think would work? I also think we need to bulk up the recommendations and maybe have a slide calling out the forecasted future growth in computers and the internet. Tom, do you want to add that?

Thanks, Ray



Oh yea, I almost forgot. Go Muskies!!!

A few thoughts on Porter's 5 forces.

Seems to me bargaining power of suppliers would be high. Think of Intel which is pretty much the CPU of choice. Pretty much one supplier is very powerful and I do not think they give their technology away to other chipmakers.

I would think threat of new entrants would be low. Dell sells Windows based computers and the whole case is pretty much about shrinking profit margins and intense competition. Who would want to enter and compete with established big dogs for the remaining scraps?

Threat of substitutes seems like it would be low as well, unless all of a sudden everyone wants an Apple computer.

This is why I hate Porter's because you can often make it look good either way. Thoughts? Tom

---

Since it looks like V5 is the latest and greatest, I am going to spend the next couple of hours going through everything and see what I can add. Anyone have any suggestions on what is missing just let me know and I will be glad to work on it. Tom ---

My last post looks like it did not save, I think I was saving at the same time as Ray or Kyle. Anyway, I added a couple graphs after the HP vs Dell table to show the trends in US and World Markets between the two. I think we can conclude that HP is increasing its market share through their acquisitions and this might be a recommendation we make for Dell. I also added some Dell icons and a picture, feel free to take these off if they later look bad when we add a background.

Thanks, Jeremy



Guys, I have to jump offline for a little while. I updated the Dell ppt to v4 and added slides on what Dell does well and where they struggle. The ppt doesn't seem to flow yet and match up with our secondary questions if someone has a minute to look at the overall structure of the presentation. Feel free to move my slides around where you want. I'll probably add a couple more slides tonight on Dell's market position (strengths) and where they're under performing. I think the Business market and IT services/value-added products is their best bet and for Dell to stay true to their direct to consumer model. The case doesn't cover EMEA market a lot but they are growing operating incomes in that area. -Kyle

I like the format and the content Dan. I will be logging on later tonight to check out where we are at with everything. I am guessing that we won't have to present since we already have 1.5 times. I can also work to fill in any gaps tomorrow. I should have a little time in the morning and at lunch to tweak anything that needs it. -Ray

Still a WIP, but wanted to explain where I was going with this in case there are differing opinions. The point is that all 7 elements of Dell's strategy contributed to their comp. advantage at one time. Now, due to changes in the environment their opportunity for competitive advantage comes from direct sales (B2B more so than consumer), expansion of products/services, customer service.



I'll be off the computer for a bit, but I'll be back to finish this and anything else needed after dinner.

Dan

I can work on the PC market and I was going to put together some slides on HP and their 4 business lines (with contributing operating income) for analysis of competition. I agree with Ray that Dell should not compete against HP in the retail world but should focus on their B2B IT support and direct to consumer business models. I'll post some slides here in a few regarding the market and competition. Kyle

Dan, I like the approach and the cooling to warming thing. My recommendation to focus on business was not meant to mean abandoning B2C entirely. I think there are still some consumers, mainly in US and Europe, that like Dell's model of direct to buyer sales and built to order. I think they need to stay true to their model and not go back into retail stores, and try and compete with HP in a race to the bottom on price, because HP is twice their size and is learning how to control costs as good, if not better then Dell. Dell needs to focus on differentiation, which I think the build to order and direct to consumer sales provides.

Do we have anyone working on slides about the overall PC market, calling out that it is forecast to continue to grow? That might be a good thing to add.

Thanks, Ray

Still very much a work in progress, but I wanted to get a temp version on here so you could see where I'm going with the strategy slides. Since this is a WIP, I haven't put it into the master yet. Let me know if there is a problem with this approach.

Ray - By focusing on the B2B channel, are you also recommending backing off on the consumer channel? I don't disagree with the B2B focus, but I think we also need to make a recommendation for the consumer market with the 1 billion additional customers on the horizon. Does dell continue to offer laptops, the consumer preference, and through what channels?

Dan

Changing my focus of what I'm working on...There are seven strategy components listed on c-121. At one time all 7 were contributing to Dell's success. Over time, some are cooling (B2C) while others are warming (additional products/services). I'm focusing on the strategy for now.

Dan

Dan - I like your idea of simplifying the case and making the main question about how to take over as the global leader in PCs. I think the main thing I took away from the case is that Dell has innovated and spend a lot of time getting really good at making PCs, mainly desktops. That allowed them to be the low cost leader. Now that other PC brands are outsourcing their manufacturing they are better able to compete and win on cost. What was once Dell's strength, manufacturing, is now a huge liability. The only way for them to continue to have success is to find a way to meaningfully differentiate from their competitors. I think they are doing this well in the B2B space, with all the value-adds and services but they have not done anything in B2C, which is why they are loosing money.

I think my recommendation would be to focus on the B2B channel, both domestic and globally, since they are strong there and their competitive advantage, in-house manufacturing and mass customization, plays well in that space.

Let me know what you think.

-Ray

The primary question sure isn't as easy as I thought it was. I don't think Dell is just looking to overtake HP in personal computers. They are trying to make a profit by giving customers what they want and finding ways to do so better than the competition. The case spent alot of time going through their evolution of how they increased productivity and lowered costs to keep the bottom line better than the competition. The competition could not duplicate what they did. Now with desktops being replaced by laptops, the model does not work. I think the question for them now is how do they differentiate from the competition in ways that lower cost and increase profit margin. Their innovation in PC production really was never duplicated but that success is not really translating to other areas of sales. Everyone is cutting costs and profit margins are slimming. HP has made some key acquisitions that are paying off and their position seems to be strengthening in many areas of the IT business world. Dell, instead of being the leader, seems to be playing catchup. Their innovation, creativity, risk-taking, strategic partnerships etc.. is what made them strong. One big question is how do they use those talents that built them so big and so fast in the other areas of the IT market. They were slow to move on outsourcing laptops, which are primarily labor costs to create the final product, now they are sitting on vacant production facilities. Where are the strategic partnerships and all the tools they used in the early years? Is it possible to duplicate that success worldwide? Maybe more R&D spending, better forcasting of future IT opportunities etc.. There are tons of questions here but I think the profit margin on PC's and laptops will continue to shrink and it is time to be a bigger player in the IT market. After I read this case I thought it was really simple, then when I started thinking about it, I saw how complex the questions really are. I can only imagine what are instructor will have to say about where Dell is or is not headed. Tom

Didn't get a chance do compile any ppts yesterday as I had hoped. Focused on it now and for the next several hours. I'll probably post here often just in case anyone else is working at the same time. Don't want to duplicate efforts.

Some Quick hits... 1) I'm putting together graphs to prove dell's decline and differing levels of success in us vs. worldwide 2) Primary question - I may be oversimplifying, but I would have just used the case title. "Can Dell overtake HP as the worldwide leader in personal computers?" The broad product/service focus are secondary questions or part of their problem. I'll defer to the overall thoughts of the group. 3) Hated this case. Long, lots of numbers. Didn't get into HP until the end of the case. 4) If you put 4 or more dashes '' after your post, it creates a line. Makes things easier to read.

More posts to follow.

Dan

I will figure out what I am doing after Kyle's, or the next, post. Tom

Guys, just got off work today, I read the case last night. I'm sorting through the ppt's posted and I'll go from there. - Kyle

Ray everything looks great. I have added a few thoughts to the SWOT and also a company overview before the time line. I will continue to work on parts throughout the day today and tomorrow as we put it all together. Thanks - Jeremy

Ray - Your slides look good. I'll add some slides later this afternoon when my son (hopefully) takes a nap.

Tom- To your question, I think we were just digging in and getting slides out there with analysis/conclusions. That will drive our structure. This was our attempt to stop using the generic structure that every group had been using. Makes it hard to divide up, but hopefully the structure will be more custom to the case.

Dan

I work until 2 today. Will be ready to work on whatever is needed Sat and Sun. Are we dividing up or just digging in? Let me know what you need from me. I will go thru all posted below today at work as it should be a light day, at least I hope! Tom

One last updated version. I put some more slides in. I also think it might be a good idea for a slide if we put those guiding values that Michael Dell stated in his speech into some graphic and then ask the question if the move back into selling retail as well as outsourcing laptop manufacturing, alligns with those values. I feel like Dell has gotten complacent and has relied on past success to translate into future growth. Maybe I am way off here so let me know what you think.



Thanks, Ray

I added some more info to the slides. I will try to work on this a little more around lunch time today. Trying to get as much knocked out before the weekend as possible.



Attached is a shell PPT I created. I started adding a little content from the case. I will work on it a little more tongith as well as tomorrow. My thought is we build up these slides and tools and then insert questions in front of the tools that the tools will answer. At the bottom of the slide with the tools we insert our conclusions. Let me know what you think.

-Ray

Hi Guys, Attached below are my notes. That is one long case. Not sure where we want to take it. I think Dell is doing well in the B2B and server space but struggling in B2C. I think the case emphasizes that their competitive advantage is their operational effeciency and their mastery of the build to order model. I think that works well in B2B but not in B2C. I think the problems Dell is facing are self-inflicted. Their only focus has been on operations and cutting cost to be the lowest cost producer. The problem in B2C is that competitors, especially HP, have caught up.

Competitors are outsourcing manufacturing, allowing them to cut costs. Dell has even started doing this with their laptops, so aren't they outsourcing their competitive advantage? Also does the move back into selling retail make any sense? Does it hurt Dell's brand essence? Some other possible questions for the presentation...

What contributed to Dell's success and rapid growth in the late 1990's? Is Dell's rapid growth and current size a strength or a weakness? Is the build to order model still an advantage? Michael Dell's evolution as a leader - Is he still right man for the job? Went from nerd to cool guy. Do B2C consumers still want to make a bunch of choices when designing/buying a PC? Why is Dell becoming more like HP and HP more like Dell? How are the two different? What does Dell do well? Where does it struggle? Why did Dell decide to become the middle man on its website and sell other company's products? Can Dell ever be successful in the B2C market in developing countries with its direct to consumer distribution? If you had to sum up each PC maker in one word what would it be? Apple - Innovation HP - Printers Dell - build to order Is Dell a consumer electronics company, a computer manufacturer, an IT service partner? Where is its focus? Is it trying to be everything to everyone?

Sorry for the long post. I will be working on a few slides today and tomorrow. I should have something posted by Thursday at lunch time. I was going to work on an industry and company timeline, questions slide,internal analysis slide, similar to Panera (the one he said was good, not the following one he said sucked), a PEST, a compare/contrast Dell vs. HP, slide about Michael Dell, and a slide with all the markets Dell competes and who the competition is.